Procter & Gamble Returns to the Dow’s Cellar

September 8, 2018 by Paul Ausick

Consumer products maker Procter & Gamble Co. (NYSE: PG) dropped the best part of two percentage points last week to go into the weekend as the worst-performing Dow Jones industrial average stock of 2018. Shares dropped 1.8% last week, and for the year to date, the stock is down 10.9%.

The second-worst Dow stock so far this year is Caterpillar Inc. (NYSE: CAT), which is down 10.3%. That is followed by 3M Co. (NYSE: MMM), down 9.7%, Chevron Corp. (NYSE: CVX), down 8.5%, and Goldman Sachs Group Inc. (NYSE: GS), down 8.2%. Of the 30 Dow stocks, 14 are showing a loss to date in 2018.

The blue-chip index dropped 38.28 points last week to close at 25,964.82, down about 0.2% compared to the previous Friday’s close. For the third quarter to date, the Dow is up 7.2%, better than the S&P 500 (up 5.8%) and the Nasdaq Composite (up 5.3%). For the year to date, the index is up 4.4%, trailing both the S&P 500 (up 6.5%) and the Nasdaq Composite (up 12.8%).

At the Barclays Global Consumer Staples Conference last week, P&G’s chief financial officer, Jon Moeller, indicated that the company remains in acquisition mode, including a move into the over-the-counter health care business. Moeller commented:

OTC healthcare [is] very attractive from a margin standpoint, from a growth standpoint, from a demographic standpoint, from a policy standpoint, and we’ll look at all tools available to continue to increase our presence in that space. … [T]here is a relative lack of true consumer brand-building acumen that’s brought to bear on many of these assets. And there’s also a distinct go-to-market advantage as health care consumption moves in some cases out of the prescription space into the OTC space …

More acquisitions mean more spending, and Moeller’s comments apparently influenced some investors to look for the exits. Shares opened Thursday at $82.91 and had lost a dollar by Friday’s closing bell.

P&G stock closed at $81.91 on Friday, down about 0.9% for the day, in a 52-week range of $70.73 to $94.67. The 12-month consensus price target on the stock is $83.08, and the forward price-to-earnings ratio is 17.39.

Sponsored: Want to Retire Early? Here’s a Great First Step

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.